Australia’s defense budget recorded a CAGR of 0.56% during the historic period, from US$27.2 billion in 2014 to US$27.8 billion in 2018.

Modernization initiatives and advanced equipment procurement programs - as outlined in white papers published by the Australian Department of Defence (DoD) - will drive expenditure. According to one white paper, the country is expected to undertake a number of modernization and procurement programs over the coming decade. Participation in a number of UN peacekeeping operations will also fuel the country’s defense expenditure, propelling the budget at a CAGR of 8.10% till 2023.

In a bid to modernize its armed forces, the DoD will increase its capital expenditure allocation from 32.6% in 2019 to 37.9% in 2023. Cumulatively, capital expenditure will value US$61.9 billion over the forecast period and Revenue expenditure will record a CAGR of 5.88% till 2023.

The Australian Government invested a cumulative amount of US$131 billion into the defense industry. The higher rate of expenditure will be triggered by plans to procure new arms and ammunition to replace defunct stock, and to lend greater assistance to allied troops in the war against terror. As a percentage of GDP, military expenditure is anticipated to be capped at an average of 1.9% over the forecast period. Australia’s defense market offers numerous opportunities for both domestic and foreign manufacturers; as one of the largest defense equipment markets in the world, the country is expected to spend US$61.9 billion on capital expenditure over the forecast period.